Friday, June 24, 2016

Greenspan: It's The End Of The World As We Know It

And in a a self referential vortex* descending into madness, from ZeroHedge, Greenspan:

Greenspan: "This Is The Worst Period I Recall; There's Nothing Like It"

During a CNBC inteview today,
when discussing the historic Brexit vote outcome, Alan Greenspan
unleashed a fiery sermon that could have been prepared just by reading a
random selection of posts from this website, the former Fed chairman
told his shocked hosts that the current period, far from the raging
"Obama recovery" spun every day by adaministration propaganda
appratchicks and one that prompted the Fed to unleash a ridiculous rate
hike cycle in December just as the US is sliding into a recession, and is instead the "worst period" he has seen, surpassing even the infamous Black Monday in severity.

"This is the worst period, I recall since I've been in public service. There's nothing like it, including the crisis — remember
October 19th, 1987, when the Dow went down by a record amount 23
percent? That I thought was the bottom of all potential problems. This
has a corrosive effect that will not go away. I'd love to find something
positive to say."

Of course, what he is referring to was a market shock which was the
result of a massive capital account imbalance resulting from the
aftermath of the Louvre Accord coupled with the then trendy Portfolio
Insurance (in which everyone was on the same side of the boat, much like
now) and not so much an all out economic malaise. Which, however, does
beg the question when a Black Monday-like market crash is coming?

Rhetorical questions aside, Greenspan was referring to the
unprecedented combination of economic stagnation, deteriorating
demographics, insolvent entitlement programs, social inequity and wealth
division, and of course, a historic debt overhang which could and
should have been cleared out in the crash of 2008 but instead was
preserved to avoid wiping out the same "equityholders" who also happen
to be the Fed's direct and indirect stakeowners.

To be fair, Greenspan, who in
recent years has become one of the loudest advocate of gold alongside
billionaires such as Druckenmiller and Soros, did not say anything our
readers did not know. The former Fed chairman said that the root of the
"British problem is far more widespread." He said the result of the
referendum will "almost surely" lead to the Scottish National Party
trying to "resurrect Scottish Independence."

Greenspan said the "euro currency is the immediate problem." While the
euro and the euro zone were major steps in a movement toward European
political integration, "it's failing," he said. "Brexit is not the end
of the set of problems, which I always thought were going to start with
the euro because the euro is a very serious problem in that the southern
part of the euro zone is being funded by the northern part and the
European Central Bank," Greenspan said....MORE

That said, I’m finding myself less horrified by Brexit than
one might have expected – in fact, less than I myself expected. The
economic consequences will be bad, but not, I’d argue, as bad as many
are claiming. The political consequences might be much more dire; but
many of the bad things I fear would probably have happened even if
Remain had won.

Start with the economics. Yes, Brexit will make Britain
poorer. It’s hard to put a number on the trade effects..., but it will
be substantial. ...

But right now all the talk is about financial repercussions –
plunging markets, recession in Britain and maybe around the world, and
so on. I still don’t see it. ...